verizon

Companies generally try to get and keep customers but recently some companies have intentionally gotten rid of customers. Some of these cases seemmorally questionable.

As reported on page 41 in the October 2007 Issue of PC World (“Companies to Customers: You’re Fired”, by Tom Spring) some companies have been terminating or degrading services. There are three main types of cases.

First, some ISPs like Comcast have started terminating service for residential users who use more bandwidth then the company deems suitable. This typically results from downloading large files and large numbers of files. While companies do have the right to deny service, Comcast advertises its service as unlimited. While this is a marketing term, it is also a term with a very clear meaning. “Unlimited” is, by definition, without limits. Hence, one cannot use the service too much.

It might be objected that “unlimited” is like “all you can eat”-it does still involve some limits. At an all you can eat buffet a person cannot stuff food into his pockets, pack it into a back pack or take food from the buffet and just keep dumping it in the trash. By analogy, there are some limits on “unlimited” service.

In reply, “unlimited” is much less restrictive than “all you can eat.” After all, the “eat” part takes care of such improper uses as throwing food away or saving it for later. “Unlimited”, as mentioned above, is quite clear in its meaning. If Comcast wishes to terminate service for people using too much bandwidth, then they need to make that part of the contract and they must not advertise their service as unlimited. If they meet those conditions, then they can justly terminate service for excess use.

Second, some phone companies have started terminating service for customers who make “excessive” calls to customer service or roam too often (Sprint Nextel) and others have restricted or terminated services for customers who roam or use the data services too often. As with Comcast, this sort of behavior is fine provided that the details are spelled out in the contracts. However, as with Comcast, some companies advertise their digital services as being unlimited when these services are not actually unlimited-as some customers found out when their services were terminated. A better solution would be to be honest about how the service is really handled and then provide suitable fees to motivate people to comply. And if people do not, then the company will have no reason to terminate their contracts-after all, they will be making suitable profits.

Interestingly, The New York State Consumer Protection Board has contended that Sprint should pay the terminated customers $200 each-the fee Sprint charges to customers who terminate their contracts early. From a moral standpoint this is certainly fair. After all, the justifications Sprint uses for such fees can simply be used by the customers who have had their contracts terminated early.

Third, as most people know, Netflix offers a service in which a customer can get an unlimited number of DVDs for a flat monthly subscription fee. Some customers use the service so much that Netflix is losing money. In retaliation, Netflix punishes them by giving those who rent fewer DVDs priority access to new titles. The company contends it is acting in a way that is “equitable.” However, this is not the case. If Netflix offers an unlimited service, it is unjust to punish customers who take advantage of what they are paying for. As with the other unlimited services, the company should be honest and upfront and simply refine its services so that they can maintain profits without having to resort to such tactics.

Thus, companies should avoid these problems by either ditching the use of the term “unlimited” (or similar terms) and clearly spelling out what the limits are. To punish customers for using what they pay for is unjust. Naturally, companies like to use terms like “unlimited”-it is a good marketing phrase and most customers will not take advantage of it. But, when a promise is made, it must be kept. After all, most companies expect their customers to abide by their contracts and they retaliate when they do not.